Freeport LNG looking to restart export terminal

Freeport LNG sought permission from federal regulators to restart commercial operations at its long-idled LNG export plant in Texas, a move that could soon provide the world with another much needed source of the super-cooled fuel.

The amount of gas flowing from U.S. pipelines to Freeport jumped on Monday to its highest since the facility was shut by a fire in June 2022 after the company restarted one of the plant's three liquefaction trains, which turn gas into LNG for export.

But energy regulators and analysts have said they do not expect Freeport, the second-biggest U.S. LNG export plant, to return to full commercial operations for months.

In a filing with the U.S. Federal Energy Regulatory Commission (FERC) on Monday, Freeport asked for permission to put what it called Phase 1 of its restart plan into commercial operation.

Phase 1 includes the full restart of the plant's three liquefaction trains, two storage tanks and one LNG loading dock.

Freeport said it would appreciate an answer from FERC on Monday "if at all possible," as it was ready to restart liquefaction Train 2 now and expects to be ready to restart Train 1 in the next few weeks.

Gas flows to the plant were on track to reach 0.5 billion cubic feet per day (bcfd) on Monday, according to data provider Refinitiv, up from an average of 43 million cubic feet per day since federal regulators approved Freeport's plan to start cooling parts of the plant on Jan. 26.

That is still only a fraction of the 2.1 bcfd of gas Freeport can turn into LNG when operating at full power. One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day.

Despite the increase in feedgas flows to Freeport, U.S. gas futures fell about 5% on Monday, putting the contract on track to close at a 25-month low.

That is because the gas market was more focused on a decline in domestic demand for the fuel for heating with the weather expected to remain mostly warmer than normal for the rest of February.

FULL OPERATIONS STILL MONTHS AWAY

On Saturday, Texas residents grilled U.S. energy regulators over their supervision of Freeport and other LNG plants.

Bryan Lethcoe, a regional director at the U.S. Pipeline Hazardous Materials Safety Administration (PHMSA), said it would take "a number of months" for Freeport to return to full operation.

That is similar to the "mid-March or later" timeframe many energy analysts have projected for Freeport's full return.

Officials at Freeport had no comment.

A couple of Freeport's customers - Japan's JERA and Osaka Gas - have said they do not expect to get LNG from the plant until after March.

Freeport's other big buyers include units of BP PLC, TotalEnergies and SK E&S.

BP's Kmarin Diamond was the first vessel to pick up LNG at Freeport since the plant shut.

The tanker, which has already left the facility and is on its way to the Suez Canal in Egypt, picked up LNG to create space in Freeport's storage tanks for new LNG expected to be produced.

There is already another vessel at the plant - Prism Agility - operated by South Korea's SK E&S, according to Refinitiv and other ship tracking data. 

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